earnings report 2019 - renault...earnings report 2019 1 in brief 1. in brief key figures 2019 2018...

EARNINGS REPORT2019

Earnings Report 2019

EARNINGS REPORT 2019

1. IN BRIEF 1

1. SALES PERFORMANCE 3OVERVIEW 3

1.1 AUTOMOTIVE 41.1.1 Group sales worldwide by Region, by brand & by type 4

1.1.2 Sales and production statistics 5

1.2 SALES FINANCING 71.2.1 New financing and services 7

1.2.2 International development and new activities 8

2. FINANCIAL RESULTS 9SUMMARY 9

2.1 COMMENTS ON THE FINANCIAL RESULTS 92.1.1 Consolidated income statement 9

2.1.2 Automotive operational free cash flow 11

2.1.3 CAPEX and Research & Development 11

2.1.4 Automotive net cash position at December 31, 2019 12

2.2 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 142.2.1 Consolidated income statement 14

2.2.2 Consolidated comprehensive income 15

2.2.3 Consolidated financial position 16

2.2.4 Changes in consolidated shareholders’ equity 17

2.2.5 Consolidated cash flows 18

2.2.6 Notes to the consolidated financial statements 19

2.2.6.1 Information on operating segments and Regions 19A. Information by operating segment 19B. Information by Region 25

1Earnings Report 2019

IN BRIEF

1. IN BRIEF

KEY FIGURES 2019 2018 Change

Worldwide Group sales (1) Million vehicles 3.75 3.88 - 3.4%

Group revenues € million 55,537 57,419 - 1,882

Group operating profit € million 2,662 3,612 - 950

% revenues 4.8% 6.3% - 1.5 pts

Group operating income € million 2,105 2,987 - 882

Contribution from associated companies € million - 190 1,540 - 1,730

o/w Nissan € million 242 1,509 - 1,267

Net income € million 19 3,451 - 3,432

Net income, Group share € million - 141 3,302 - 3,443

Earnings per share € - 0.52 12.24 - 12.76

Automotive operational free cash flow (2) € million 153 607 - 454

Automotive net cash position (3) € million 1,734 3,702 - 1,968

Sales Financing, average performing assets € billion 47.4 44.4 + 6.8%

(1) Worldwide Group sales include Jinbei&Huasong sales.(2) Automotive operational Free cash flow: cash flows after interest and tax (excluding dividends received from publicly listed companies) minus tangible and intangible investments

net of disposals +/- change in the working capital requirement.(3) 2019 figures include the impacts of the application of IFRS 16 “Leases” from January 1, 2019. The figures for 2018 have not been restated.

OVERVIEWIn 2019, Groupe Renault sales volumes totaled 3,753,723 vehicles, down - 3.4%. Groupe Renault maintains a market share of 4.25% in a market down - 4.8%. Worldwide sales of the Group’s electric vehicles rose + 23.5% to 62,447 vehicles. In the light commercial vehicle segment, the Group volumes rose + 0.7% to reach a new sales record.Group revenues reached €55,537 million (- 3.3%), including €3,130 million for AVTOVAZ (+ 3.0%). Excluding currency impact, Group revenues would have been down - 2.7%.Automotive excluding AVTOVAZ revenues decreased - 4.2% to €49,002 million. This decline was due to a negative volume effect of - 1.4 points notably linked to lower sales in Argentina, Turkey and Algeria. Sales to partners were down - 3.4 points due to lower vehicle production for Nissan and Daimler, as well as the decline in demand for diesel engines in Europe and the sharp drop in our CKD(1) business in China and the end of this activity in Iran.The currency effect, negative by - 0.7 points, was mainly due to the sharp devaluation of the Argentinian peso and the Turkish lira. The price effect, positive by + 1.7 points, stemmed from efforts to offset these currency devaluations and price increases in Europe, notably related to regulatory costs. Since the fourth quarter, the price effect has benefited from a more ambitious pricing policy, particularly in Europe with New Clio. The Group’s operating margin amounted to €2,662 million and represented 4.8% of revenues compared to 6.3% in 2018.

Automotive excluding AVTOVAZ operating margin was down - €920 million to €1,284 million, which represented 2.6% of revenues compared to 4.3% in 2018. The change can be explained by the following:• Volume effect had a negative impact of - €582 million, including

sales to partners.• Mix/price/enrichment effect was negative - €587 million

because of enrichment (regulatory and on new products) and the decrease in the diesel sales in Europe.

• The Monozukuri effect was positive by + €547 million. It benefited from purchasing performance, increase in the capitalization rate of R&D but has been penalized by an increase in the depreciation.

• Raw materials weighed for - €324 million largely on higher prices for precious metals and steel.

• The improvement of + €121 million of G&A stemmed from the company’s effort to limit its costs and included positive non-recurring effects.

• Currencies impacted by + €24 million due to the positive effect of the depreciation of the Turkish lira on production costs which compensated for the negative impact of the Argentinian Peso.

The AVTOVAZ operating margin contribution amounted to €155 million, compared to €204 million in 2018 after lower positive non-recurring effects for about €70 million. Sales Financing contributed €1,223 million to the Group’s operating margin, compared to €1,204 million in 2018. This + 1.6% growth was due to the increase in average performing assets, reflecting RCI Banque’s strong commercial momentum,

(1) CKD : Complete Knock Down

2 Earnings Report 2019

IN BRIEF

despite a negative currency effect of - €26 million and a rise in losses of mobility services activities also for - €26 million. Other operating income and expenses amounted to - €557 million (compared to - €625 million in 2018) coming from nearly - €240 million of restructuring charges, notably related to the early retirement program in France and impairments for about - €300 million notably in China and Argentina. The Group’s operating income came to €2,105 million, compared to €2,987 million in 2018.Net financial income and expenses amounted to - €442 million, compared to - €353 million in 2018 despite an almost stable cost of funding. The deterioration in other financial income and expenses is due to lower dividends received from non-consolidated entities and miscellaneous expenses.The contribution of associated companies came to - €190 million, compared to + €1,540 million in 2018. Nissan contributed positively for + €242 million while the contribution of the other associated companies (-€432 million) was heavily penalized by the weak performance of our Chinese joint ventures also leading to impairments. Current and deferred taxes showed an expense of - €1,454 million including - €753 million due to the discontinuation of the recognition of deferred tax assets on tax losses in France.

Net income amounted to €19 million, and net income Group share to - €141 million (- €0.52 per share compared to €12.24 per share in 2018). Automotive operational free cash flow, including AVTOVAZ for €28 million, was positive at €153 million. It is the result of a strong increase in investments, an €350 million increase in dividends received from RCI and a positive change in working capital requirements excluding AVTOVAZ for €1,027 million excluding sales with buy-back commitments. The Automotive activity at December 31, 2019 held +€15.8 billion of liquidity and a net cash position of + €1.7 billion. At December 31, 2019, total inventories including the independent network) represented 68 days of sales, compared to 70 days at end December 2018. A dividend of €1.10 per share, compared to €3.55 per share in 2018, will be submitted for approval at the Shareholders’ Annual General Meeting.The shares would be traded ex-dividend on April 30, 2020 and dividends paid out from May 5, 2020.

2020 OUTLOOKThe global automotive market should decline this year with Europe at least down - 3%, Russia at around - 3% and the Brazilian market up around + 5%.In this context of low visibility notably due to CAFE regulation in Europe, and a significant rise of depreciation related to investments made for preparing the future, Groupe Renault is aiming to:• achieve Group revenues in line with 2019 at constant exchange rates,(1)

• achieve a Group operating margin between 3% and 4%,• generate a positive Automotive operational free cash flow before restructuring expenses.This guidance does not take into account the possible impacts related to the Coronavirus health crisis.

(1) In order to analyze the change in consolidated revenues at constant exchange rates, Groupe Renault recalculates revenues for the current year by applying the average annual exchange rates of the previous year.


SALES PERFORMANCEOVERVIEW 1

OVERVIEW

• Groupe Renault consolidates its positions in its core markets and maintains its global market share.• Groupe Renault maintains a market share of 4.25% in a market down 4.8%. Sales volumes totaled 3,753,723 vehicles, down 3.4%.• Over the last quarter, the Group recorded an increase in sales thanks to the success of New Clio in Europe, Arkana in Russia and Triber in India. • The Group is consolidating its positions in its core markets: Europe grew by 1.3%, in Russia it confirmed its solid leadership with 29% market

share, in Brazil Renault became the fourth brand, gaining two positions, and in India, Renault is the only brand to have gained in passenger car volume.

• For the Group, 2020 will mark a new stage in its electric offensive with the launch of Twingo Z.E. and the deployment of its new E-TECH hybrid and plug-in hybrid offers.

• The attractiveness of new products to customers will enable the Group to continue to improve its price positioning initiated in 2019.• In a falling global automotive market, RCI Bank and Services achieved a good commercial performance with 1,798,432 contracts financed at the

end of 2019.As of May 2019, the scope of the Regions has changed: the Africa Middle-East India Region becomes Africa Middle-East India Pacific Region, including the former Asia Pacific Region without China which becomes now a separated Region. All other Regions remain unchanged. 2018 data are adjusted with new Regions structure.

GROUPE RENAULT’S TOP FIFTEEN MARKETS

SALES

Volumes 2019 *

(in units)

PC / LCVmarket share

2019(%)

Change in market share

on 2018(points)

1 France 698,723 25.9 - 0.3

2 Russia * * 508,647 29.0 + 1.4

3 Germany 247,155 6.3 0.0

4 Brazil 239,174 9.0 + 0.3

5 Italy 220,403 10.5 + 0.5

6 Spain 183,264 12.4 + 0.1

7 China * * * 179,494 0.7 - 0.1

8 United-Kingdom 109,952 4.1 + 0.3

9 Belgium+Luxembourg 90,989 13.1 + 0.2

10 India 88,869 2.5 + 0.4

11 South Korea 86,859 5.0 - 0.1

12 Turkey 85,055 17.8 - 0.9

13 Romania 72,165 37.6 - 1.1

14 Morocco 70,281 42.4 - 0.2

15 Poland 69,090 11.1 + 0.5

* Preliminary figures (excluding Twizy sales). * * Including AUTOVAZ sales. * * * Including Jinbei&Huasong.

1. SALES PERFORMANCE


SALES PERFORMANCE1.1 AUTOMOTIVE1

1.1 AUTOMOTIVE1.1.1 GROUP SALES WORLDWIDE BY REGION, BY BRAND & BY TYPE

PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES (UNITS) * *2019 * 2018 Change

(%)

GROUP 3,753,723 3,884,273 - 3.4

EUROPE REGION 1,945,821 1,920,751 + 1.3Renault 1,370,571 1,401,574 - 2.2Dacia 564,854 511,445 + 10.4Alpine 4,431 1,946 + + + Lada 5,965 5,786 + 3.1 AFRICA MIDDLE-EAST INDIA & PACIFIC REGION 453,223 561,860 - 19.3Renault 280,569 374,441 - 25.1Dacia 89,243 98,338 - 9.2Renault Samsung Motors 79,081 84,954 - 6.9Alpine 403 148 + + + Lada 3,034 3,087 - 1.7Jinbei&Huasong * * * 893 892 + 0.1 EURASIA REGION 750,571 747,729 + 0.4Renault 263,110 267,538 - 1.7Dacia 82,473 90,838 - 9.2Lada 403,634 389,153 + 3.7Jinbei&Huasong * * * 0 200 - 100.0AVTOVAZ 1,354 0 + + + AMERICAS REGION 424,537 437,081 - 2.9Renault 420,897 436,162 - 3.5Alpine 1 0 + + + Lada 256 366 - 30.1Jinbei&Huasong * * * 3,383 553 + + + CHINA REGION 179,571 216,852 - 17.2Renault 21,946 52,887 - 58.5Jinbei&Huasong * * * 157,625 163,965 - 3.9 BY BRAND Renault 2,357,093 2,532,602 - 6.9Dacia 736,570 700,621 + 5.1Renault Samsung Motors 79,081 84,954 - 6.9Alpine 4,835 2,094 + + + Lada 412,889 398,392 + 3.6Jinbei&Huasong * * * 161,901 165,610 - 2.2AVTOVAZ 1,354 0 + + + BY VEHICLE TYPE Passenger cars 3,129,434 3,264,256 - 4.1Light commercial vehicles 624,289 620,017 + 0.7

* Preliminary figures. * * Twizy is a quadricycle and therefore not included in Group automotive sales except in Bermuda, Chile, Colombia, South Korea, Guatemala, Ireland, Lebanon, Malaisia and Mexico

where Twizy is registered as a passenger car. * * * Jinbei & Huasong includes the brands Jinbei JV, Jinbei not JV (Shineray and Huarui) and Huasong.

In 2019, Groupe Renault sold 3,753,723 vehicles worldwide, down 3.4% (- 130,550 vehicles of which - 183,000 in the Iranian, Argentinean and Turkish markets) in a market that declined by 4.8%.Group Market share now stands at 4.25%.

With 2,357,093 vehicles sold in 2019 (-6.9% compared to last year), the Renault brand accounted for 63% of the Group’s volumes. Dacia and Lada brands increased by +5.1% and +3.6% respectively.


SALES PERFORMANCE1.1 AUTOMOTIVE 1

The Dacia brand set a new sales record for the seventh consecutive year in Europe, with 564,854 vehicles sold (+ 10.4%). Sales of the Alpine brand have more than doubled this year. Jinbei&Huasong’s sales fell by -2.2% and Renault Samsung Motors by -6.9%.Worldwide sales of the Group’s electric vehicles rose 23.5% to 62,447 vehicles. New ZOE, launched at the end of 2019, will be the flagship of the electric range in 2020. In the light commercial electric vehicle segment, Kangoo Z.E. remains the undisputed leader, with a growth of 19.2% to 10,349 vehicles. In China, the Group launched Renault City K-ZE in November and recorded 2,658 sales in two months.In the light commercial vehicle segment, the Group volumes rose 0.7% to reach a new sales record. This record was achieved thanks to the performance of the Renault brand in Europe, which rose 3.6% in a market that grew by 2.8%.Renault Pro+ maintained its two European leaderships once again in terms of sales volumes for vans and light commercial vehicles, as well as sales of electric light commercial vehicles.

EuropeIn Europe, sales rose 1.3% in a market up 1.2%.Clio is the leader in the B-segment, with 45% of New Clio sales in the top-of-the-range version. Clio 4 is maintained in the range to provide a broader customer offering. Captur remains the leading SUV in its category. ZOE saw its volumes grow by 19.1% (47,027 vehicles).

The Dacia brand sold 564,854 vehicles (+10.4%). This increase was driven by the performance of Duster and Sandero.

Outside EuropeIn Russia, Groupe Renault led the way with a market share of 29%, up 1.4 points. Sales rose 2.3% in a market that contracted by 2.6%.Lada sales rose 0.6% to 362,356 vehicles, confirming its leading position with a 20.7% market share. Lada Granta and Lada Vesta confirmed their position as the best-selling vehicles in Russia.The Renault brand also grew by 5.8% to 144,989 vehicles sold, thanks to the successful launch of Arkana in the second half.In Brazil, sales volumes rose 11.3% to 239,174 vehicles and market share reached a record of 9% (+0.3 points) thanks to the good results of Kwid. The market remained dynamic and grew by 7.4%.In India, the Group’s strategy is beginning to bear fruit. Renault is the only brand to make progress in 2019 in the passenger cars segment. Sales rose 7.9% in a market that contracted by 11.3%. The increase was mainly due to the successful launch of Triber and the success of New Kwid. Market share reached 2.5%, up 0.45 points compared to 2018. Triber, the compact vehicle with unparalleled flexibility for transporting up to seven people, launched in August, has already recorded 24,142 sales, with more than half of these in the premium version. Triber is positioned in a segment that is expected to account for nearly 50% of the Indian market by 2022.Outside of the core countries, the Group is the leader in Africa, Turkey, Colombia and Romania.

1.1.2 SALES AND PRODUCTION STATISTICS

1.1.2.1 GROUP SALES WORLDWIDEConsolidated global sales by brand and geographic areas as well as by model are available in the regulated information of the Finance section on Groupe Renault website.

https://group.renault.com/en/finance-2/regulated-information/ Monthly sales

1.1.2.2 GROUP WORLDWIDE PRODUCTION

PASSENGER CARS AND LIGHT COMMERCIAL VEHICLES (UNITS)2019 * * 2018 Change

(%)

GROUP GLOBAL PRODUCTION * 3,662,802 3,846,603 - 4.8

O/w produced for partners:Nissan 196,682 253,949 - 22.6Daimler 49,969 71,998 - 30.6GM 26,796 24,098 + 11.2Fiat 23,031 25,035 - 8.0Renault Trucks 15,580 15,802 - 1.4

PRODUCED BY PARTNERS FOR RENAULT2019 * * 2018 Change

(%)

Nissan - Chennai 100,546 90,262 + 11.4Other Nissan 962 1,972 - 51.2China JVs - DRAC, RBJAC, e-GT-NEV 54,101 90,226 *** - 40.0Pars Khodro, Iran Khodro - Iran - 91,000 - - -

* Production data concern the number of vehicles leaving the production line.** Preliminary figures.*** Production volumes have been adjusted for an amount of + 42,468 units for a correction of error on RBJAC.


SALES PERFORMANCE1.1 AUTOMOTIVE1

1.1.2.3 GEOGRAPHICAL ORGANIZATION OF THE RENAULT GROUP BY REGION – COUNTRIES IN EACH REGIONAt December 31, 2019

EUROPE AFRICA MIDDLE-EAST INDIA AND PACIFIC EURASIA AMERICAS CHINA

AlbaniaAustria

Baltic StatesBelgium-Lux.

BosniaCyprus

Czech Rep.Croatia

DenmarkFinland

France Metropolitan Germany

GreeceHungaryIcelandIreland

ItalyMacedonia

MaltaMontenegroNetherlands

NorwayPoland

PortugalSerbia

SlovakiaSlovenia

SpainSweden

SwitzerlandUnited Kingdom

Abu DhabiAlgeriaAngola

AustraliaBahrain

BangladeshBeninBrunei

Burkina FasoCambodiaCameroonCape Verde

CubaDjiboutiDubaiEgypt

EthiopiaFrench Guiana

GabonGhana

Green CapGuadeloupe

GuineaIndia

IndonesiaIraq

IsraelIvory Coast

JapanJordanKenyaKuwait

La RéunionLaos

LebanonLiberia

MadagascarMalawi

MalaysiaMali

MartiniqueMauritaniaMauritiusMayotte

MoroccoMozambique

NepalNew CaledoniaNew Zealand

OmanPalestine

PhilippinesQatar

Rep. Democratic CongoSaint-Pierre & Miquelon

Saudi ArabiaSenegal

SeychellesSingapore

South Africa + NamibiaSouth Korea

SudanTahiti

TanzaniaThailand

TogoTunisiaUgandaVietnamZambia

Zimbabwe

ArmeniaAzerbaijan

BelarusBulgariaGeorgia

kazakhstanKyrgyzstan

MoldovaMongoliaRomania

RussiaTajikistan

TurkeyUkraine

Uzbekistan

ArgentinaBermuda

BoliviaBrazilChile

ColombiaCosta Rica

CuracaoDominica

Dominican Rep.Ecuador

GuatemalaMexico

Netherlands AntillesPanama

ParaguayPeru

Trinidad & TobagoUruguay

ChinaHong Kong


SALES PERFORMANCE1.2 SALES FINANCING 1

1.2 SALES FINANCING

1.2.1 NEW FINANCING AND SERVICESRCI Bank and Services once again posted an increase in its sales performance for 2019 and continues to deploy its strategic ambitions. RCI Bank and Services is thus a true strategic partner of the Alliance’s brands.In a falling global automotive market, RCI Bank and Services achieved a good commercial performance with 1,798,432 contracts financed at end 2019, generating €21.4 billion in new financings up + 2.3% compared to last year.The Group’s financing penetration rate thus stands at 42.2%, an increase of 1.5 points compared to last year.

Excluding Turkey, Russia and India (companies consolidated by the equity method), this rate amounts to 44.2%, compared with 42.9% in 2018.

The used vehicle financing business continues to grow with 368,409 contracts financed, up +3.7% compared to 2018.

In this context, average performing assets (APA) now stand at €47.4 billion, showing a 6.8% increase compared to last year. Of this amount, €37.2 billion are directly related to the Customers business, up 9.4%.

RCI BANQUE FINANCING PERFORMANCE

2019 2018 Change

(%)

Number of financing contracts (Thousands) 1,798 1,799 -0.0- Including UV contracts (Thousands) 368 355 + 3.7

New financing (€ billion) 21.4 20.9 + 2.3Average Productive assets (€ billion) 47.4 44.4 + 6.8

PENETRATION RATE BY BRAND

2019

(%)2018

(%)Change (points)

Renault 42.7 42.0 + 0.7Dacia 44.7 43.4 + 1.3Renault Samsung Motors 59.2 56.1 + 3.0Nissan 36.5 34.2 + 2.4Infiniti 29.9 22.9 + 7.0Datsun 23.9 22.9 + 1.0RCI Banque 42.2 40.7 + 1.5

PENETRATION RATE BY REGION

2019

(%)2018

(%)Change (points)

Europe 45.4 44.9 + 0.5Americas 38.0 35.0 + 3.0Africa Middle-East India and Pacific (1) 40.9 37.3 + 3.6Eurasia 29.7 27.0 + 2.8RCI Banque 42.2 40.7 + 1.5

(1) Organizational change within the Groupe Renault regions since May 1, 2019: The creation of the new region « Africa Middle-East India and Pacific » results for RCI in the regrouping of the former regions « Africa Middle-East India » and « Asia-Pacific » including now Algeria, Morocco, India and South Korea.

Pillar of the Group’s strategy, the services business continued to develop with an increase of 5.2% over the last twelve months. The volume of services sold for 2019 represents 5.1 million insurance and

service contracts, of which 68% are customer and vehicle use-related services.

RCI BANQUE SERVICES PERFORMANCE 2019 2018 Change

Number of services contracts (Thousands) 5,092 4,839 + 5.2%Penetration rate on Services 150.3% 136.5% + 13.8 pts


SALES PERFORMANCE1.2 SALES FINANCING1

1.2.2 INTERNATIONAL DEVELOPMENT AND NEW ACTIVITIESIn line with its refinancing diversification strategy, RCI Bank and Services is pursuing the development of its savings activity - for the first time outside Europe – with the launch of a savings product for individual customers in Brazil, in March 2019. It is the first finance company to do so in the Brazilian market. RCI Bank and Services now has a deposit collection activity in five markets: France, Germany, Austria, the United Kingdom and Brazil.

Thanks to its banking license from the Prudential Regulation Authority (PRA) obtained in March 2019 and the creation of RCI Bank UK Limited, RCI Bank and Services now has a full banking subsidiary in the UK. RCI Bank and Services is able to continue to exercise its deposit collection activity in the UK market, despite the Brexit.


2FINANCIAL RESULTSSUMMARY

SUMMARY

(€ million) 2019 2018 Change

Group revenues 55,537 57,419 - 3.3%

Operating profit 2,662 3,612 - 950Operating income 2,105 2,987 - 882 Net Financial income & expenses - 442 - 353 - 89Contribution from associated companies - 190 1,540 - 1,730

O/w Nissan 242 1,509 - 1,267

Net income 19 3,451 - 3,432

Automotive operational free cash flow (1) 153 607 - 454

Automotive Net cash position (2) + 1,734 + 3,702 - 1,968Shareholders’ equity 35,331 36,088 (3) - 757

(1) Automotive operational Free cash flow: cash flows after interest and tax (excluding dividends received from publicly listed companies) minus tangible and intangible investments net of disposals +/- change in the working capital requirement.

(2) 2019 figures include the impacts of the application of IFRS 16 “Leases” from January 1, 2019. The figures for 2018 have not been restated.(3) Shareholder’s equity at December 31, 2018, has been adjusted by an amount of - €57 million due to correction of an error concerning operations in the Americas Region, with a

corresponding entry in provisions for risks on taxes other than income taxes.

2.1 COMMENTS ON THE FINANCIAL RESULTS2.1.1 CONSOLIDATED INCOME STATEMENTOPERATING SEGMENT CONTRIBUTION TO GROUP REVENUES

(€ million)

2019 2018Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year

Automotive excluding AVTOVAZ 10,916 13,875 9,662 14,549 49,002 11,646 15,221 10,057 14,247 51,171AVTOVAZ 767 790 791 782 3,130 716 761 627 936 3,040Sales Financing 844 858 843 860 3,405 793 820 800 795 3,208Total 12,527 15 ,523 11,296 16,191 55,537 13,155 16,802 11,484 15,978 57,419

(%)

ChangeQ1 Q2 Q3 Q4 Year

Automotive excluding AVTOVAZ - 6.3 - 8.8 - 3.9 + 2.1 - 4.2AVTOVAZ + 7.1 + 3.8 + 26.2 - 16.5 + 3.0Sales Financing + 6.4 + 4.6 + 5.4 + 8.2 + 6.1Total - 4.8 - 7.6 - 1.6 + 1.3 - 3.3

Group revenues reached €55,537 million (- 3.3%), including €3,130 million for AVTOVAZ (+ 3.0%). Excluding currency impact, Group revenues would have been down - 2.7%.Automotive excluding AVTOVAZ revenues decreased - 4.2% to €49,002 million. This decline was due to a negative volume effect of - 1.4 points notably linked to lower sales in Argentina, Turkey and Algeria. Sales to partners were down - 3.4 points due to lower vehicle production for Nissan and Daimler, as well as the decline in demand

for diesel engines in Europe and the sharp drop in our CKD(1) business in China and the end of this activity in Iran.The currency effect, negative by - 0.7 points, was mainly due to the sharp devaluation of the Argentinian peso and the Turkish lira. The price effect, positive by + 1.7 points, stemmed from efforts to offset these currency devaluations and price increases in Europe, notably related to regulatory costs. Since the fourth quarter, the price effect has benefited from a more ambitious pricing policy, particularly in Europe with Clio.

2. FINANCIAL RESULTS

(1) CKD : Complete Knock Down.


2 FINANCIAL RESULTS2.1 COMMENTS ON THE FINANCIAL RESULTS

OPERATING SEGMENT CONTRIBUTION TO GROUP OPERATING PROFIT


Automotive division excluding AVTOVAZ 1,284 2,204 - 920% of division revenues 2.6% 4.3% - 1.7 ptsAVTOVAZ 155 204 - 49% AVTOVAZ revenues 5.0% 6.7% - 1.8 ptsSales Financing 1,223 1,204 + 19Total 2,662 3,612 - 950% of Group revenues 4.8% 6.3% - 1.5 pts

The Group’s operating margin amounted to €2,662 million and represented 4.8% of revenues compared to 6.3% in 2018.Automotive excluding AVTOVAZ operating margin was down - €920 million to €1,284 million, which represented 2.6% of revenues compared to 4.3% in 2018. The change can be explained by the following:• Volume effect had a negative impact of - €582 million, including

sales to partners.• Mix/price/enrichment effect was negative - €587 million because

of enrichment (regulatory and on new products) and the decrease in the diesel sales in Europe.

• The Monozukuri effect was positive by + €547 million. It benefited from purchasing performance, increase in the capitalization rate of R&D but has been penalized by an increase in the depreciation.

• Raw materials weighed for - €324 million largely on higher prices for precious metals and steel.

• The improvement of + €121 million of G&A stemmed from the company’s effort to limit its costs and included positive non-recurring effects.

• Currencies impacted by + €24 million due to the positive effect of the depreciation of the Turkish lira on production costs which compensated for the negative impact of the Argentinian Peso.

The AVTOVAZ operating margin contribution amounted to €155 million, compared to €204 million in 2018 after lower positive non-recurring effects for about €70 million. Sales Financing contributed €1,223 million to the Group operating margin, compared to €1,204 million in 2018. This + 1.6% increase is the result of growth in outstanding loans, with average earning assets rising + 6.8% to 47.4 billion euros in 2019. Also noteworthy is the growing contribution of the margin on services, which now stands at nearly 643 million euros, or 31% of Net Banking Income.

The total cost of risk, which includes the application of IFRS9, remains under control at 0.42% of average performing assets, compared to 0.33% last year. The cost of risk on Customer activity (personal and business financing) improved significantly to 0.47% of average performing assets in 2019 vs. 0.51% in 2018, confirming a robust acceptance and collection policy. The cost of risk on the Networks business (dealer financing) represented an income of +0.09% in 2019 vs. an income of +0.33% in 2018 (substantial write-backs of provisions in 2018).Other operating income and expenses amounted to - €557 million (compared to - €625 million in 2018) coming from nearly - €240 million of restructuring charges, notably related to the early retirement program in France and impairments for about - €300 million notably in China and Argentina. The Group’s operating income came to €2,105 million, compared to €2,987 million in 2018.Net financial income and expenses amounted to - €442 million, compared to - €353 million in 2018 despite an almost stable cost of funding. The deterioration in other financial income and expenses is due to lower dividends received from non-consolidated entities and miscellaneous expenses.The contribution of associated companies came to - €190 million, compared to + €1,540 million in 2018. Nissan contributed positively for + €242 million while the contribution of the other associated companies (-€432 million) was heavily penalized by the weak performance of our Chinese joint ventures also leading to impairments. Current and deferred taxes showed an expense of - €1,454 million including - €753 million due to the discontinuation of the recognition of deferred tax assets on tax losses in France. Net income amounted to €19 million, and net income Group share to - €141 million (- €0.52 per share compared to €12.24 per share in 2018).


2FINANCIAL RESULTS2.1 COMMENTS ON THE FINANCIAL RESULTS

2.1.2 AUTOMOTIVE OPERATIONAL FREE CASH FLOW

AUTOMOTIVE OPERATIONAL FREE CASH FLOW


Cash flow after interest and tax (excluding dividends received from publicly listed companies) + 4,144 + 4 ,386 - 242Change in the working capital requirement + 1,829 + 781 + 1,048Tangible and intangible investments net of disposals - 4,846 - 4,166 - 680Leased vehicles and batteries - 1,002 - 509 - 493Operational free cash flow excluding AVTOVAZ + 125 + 492 - 367Operational free cash flow AVTOVAZ + 28 + 115 - 87Automotive operational free cash flow + 153 + 607 - 454

In 2019, the Automotive operational free cash flow including AVTOVAZ segment reported positive operational free cash flow of €153 million, of which €28 million of AVTOVAZ operational free cash flow. Excluding AVTOVAZ segment, the change is resulting from: • cash flow after interest and tax (excluding dividends received

from publicly listed companies) of + €4,144 million. It benefited from a higher dividend from RCI at 500 million euros compared to 150 million in 2018;

• a positive change in the working capital requirement of €1,829 million (of which €802 million euros in working capital requirements related to sales with a buyback commitment);

• property, plant and equipment and intangible investments net of disposals of - €4,846 million, an increase of €680 million compared with 2018;

• investments related to vehicles with buy-back commitments and leased batteries for - €1,002 million.

2.1.3 CAPEX AND RESEARCH & DEVELOPMENT

TANGIBLE AND INTANGIBLE INVESTMENTS NET OF DISPOSALS BY OPERATING SEGMENT

2019 (€ million)

Tangible and intangible investments net of disposals excluding capitalized development costs

and leased vehicles and batteries

Capitalized development

costs

Total

Automotive excluding AVTOVAZ 2,921 1,925 4,846AVTOVAZ 75 60 135Sales Financing 10 0 10Total 3,006 1,985 4,991

2018 (€ million)

Tangible and intangible investments net of disposals excluding capitalized development costs

and leased vehicles and batteries

Capitalized development costs

Total

Automotive excluding AVTOVAZ 2,476 1,695 4,171AVTOVAZ 62 22 84Sales Financing 19 0 19Total 2 ,557 1,717 4,274

Total gross investment in 2019 is up compared to 2018, with Europe accounting for 66% and the rest of the world for 34%.• In Europe, the investments made are mainly devoted to renewing

the AB range (New Clio and Captur), the light commercial vehicles range (Kangoo and Master), adapting the industrial tool to changes in demand for engines (including electrification and hybridization), and applying Euro6 regulations.

• Outside Europe, investments targeted mainly the renewal of the AB range (New Clio in Turkey), the C range (new vehicle Arkana in Russia, XM3 in South Korea), the Global Access range (successor of Logan and Sandero in Romania and Morocco, and of Duster in Brazil) and the light commercial vehicles (successor of Dokker in Morocco) and the industrialization of the engines of these vehicles.


2 FINANCIAL RESULTS2.1 COMMENTS ON THE FINANCIAL RESULTS

RESEARCH AND DEVELOPMENT EXPENSES RECORDED IN THE INCOME STATEMENT

Analysis of research and development costs:(€ million) 2019 2018 Change

R&D expenses -3,697 -3,516 - 181Capitalized development costs 1,985 1,717 + 268Capitalization rate 53.7% 48.8% + 4.9 ptsAmortization of capitalized development costs - 946 - 799 - 147Gross R&D expenses recorded in the income statement * - 2,658 -2,598 - 60Of which AVTOVAZ -6 -23 + 17

* Research and development expenses are reported net of research tax credits for the vehicle development activity. Gross R&D expenses: R&D expenses before expenses billed to third parties and others.

The capitalization rate increased from 48.8% in 2018 to 53.7% in 2019, in connection with the progress of the projects.The rise in research and development expenses is explained by efforts to respond to new issues for connected, driverless and electric vehicles, and ensure that engines comply with new regulations applicable, particularly in Europe.

The increase in capitalized development expenses is mainly explained by the resumption of capitalization since the second half-year of 2018 for electric vehicle development expenses, and the achievement of the technical milestone marking the start of capitalization for significant projects (i.e. the formal decision to begin development and industrial production).

NET CAPEX AND R&D EXPENSES IN % OF REVENUES

(€ million) 2019 2018

Tangible investments net of disposals (excluding capitalized leased vehicles and batteries) and intangible (excluding development costs capitalized) 3,006 2,557 CAPEX invoice to third parties and others - 213 - 219 Net industrial and commercial investments excluding R&D capitalized (1) 2,793 2,338 % of Group revenues 5.0% 4.1%R&D expenses 3,697 3,516 O/w billed to third parties and others - 521 - 475 Net R&D expenses (2) 3,176 3,041 % of Group revenues 5.7% 5.3%Net CAPEX and R&D expenses (1) + (2) 5,969 5,379 % of Group revenues 10.7% 9.4%

Net Capital expenditures and R&D expenses amounted to 10.7% of Group Revenues in 2019, compared with 9.4% in 2018, up 1.3 points.

2.1.4 AUTOMOTIVE NET CASH POSITION AT DECEMBER 31, 2019

CHANGE IN AUTOMOTIVE NET CASH POSITION (€ million)

Automotive Net cash position at December 31, 2018 + 3,7022019 operational free cash flow + 153Dividends received + 625Dividends paid to Renault’s shareholders and minority shareholders - 1,120Financial investments and others - 887Impact of the application IFRS 16 “Leases” - 739Automotive Net cash position at December 31, 2019 + 1,734

Beyond the Automotive segment reported positive operational free cash flow of + €153 million, the €1,968 million decrease in the net cash position of the Automotive segment compared with December 31, 2018 is mainly due to :• the usual mismatch between dividends received from Nissan (paid

in two times, one in the first half and the other in the second half) and dividends paid by Renault in June;

• the application of IFSR16 for - €739 million;• financial investment and others for - €887 million notably related to

impacts of changes in the scope of consolidation and investments in mobility and autonomous driving.


2FINANCIAL RESULTS2.1 COMMENTS ON THE FINANCIAL RESULTS

AUTOMOTIVE NET CASH POSITION

(€ million) Dec. 31, 2019 Dec. 31, 2018

Non-current financial liabilities - 7,927 - 6,196Current financial liabilities - 3,875 - 3,343Non-current financial assets - other securities, loans and derivatives on financial operations + 64 + 55Current financial assets + 1,174 + 1,409Cash and cash equivalents + 12,298 + 11,777Automotive Net cash position + 1,734 + 3,702

In 2019, Renault issued two Eurobonds of €1 billion and €500 million (maturity six and eight years respectively) via its EMTN program.The Automotive segment’s liquidity reserves (including AVTOVAZ) stood at €15.8 billion as of December 31st, 2019. This reserve consisted of:• €12.3 billion in cash and cash equivalents;• €3.5 billion in undrawn committed credit lines.

At December 31, 2019, RCI Banque had available liquidity of €9.6 billion, consisting of:• €4.5 billion of undrawn confirmed credit lines;• €2.4 billion of central-bank eligible collateral;• €2.2 billion of high quality liquid assets (HQLA);• €0.5 billion of financial assets.


2 FINANCIAL RESULTS2.2 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.2 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.2.1 CONSOLIDATED INCOME STATEMENT

(€ million) Notes 2019 (1) 2018

Revenues 4 55,537 57,419

Cost of goods and services sold (44,665) (45,417)Research and development expenses 10-A (2,658) (2,598)Selling, general and administrative expenses (5,552) (5,792)

Operating margin 5 2,662 3,612

Other operating income and expenses 6 (557) (625)Other operating income 6 80 149Other operating expenses 6 (637) (774)

Operating income (loss) 2,105 2,987

Cost of net financial indebtedness 7 (311) (308)Cost of gross financial indebtedness 7 (386) (373)Income on cash and financial assets 7 75 65

Other financial income and expenses 7 (131) (45)

Financial income (expenses) 7 (442) (353)

Share in net income (loss) of associates and joint ventures (190) 1,540Nissan 12 242 1,509Other associates and joint ventures 13 (432) 31

Pre-tax income 1,473 4,174

Current and deferred taxes 8 (1,454) (723)

Net income 19 3,451

Net income – parent-company shareholders’ share (141) 3,302Net income - non-controlling interests’ share 160 149Basic earnings per share (2) in € (0.52) 12.24Diluted earnings per share (2) in € (0.52) 12.13Number of shares outstanding (in thousands)

for basic earnings per share 9 271,639 269,850for diluted earnings per share 9 273,569 272,222

(1) The figures for 2019 are established in application of IFRS 16 “Leases”. The impacts of application of IFRS 16 from January 1, 2019 are presented in note 2-A2. The figures for 2018 have not been restated.

(2) Net income – parent-company shareholders’ share divided by the number of shares stated.


2FINANCIAL RESULTS2.2 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2.2.2 CONSOLIDATED COMPREHENSIVE INCOME

(€ million)

2019 2018Gross Tax

effectNet Gross Tax

effectNet

NET INCOME 1,473 (1,454) 19 4,174 (723) 3,451

OTHER COMPONENTS OF COMPREHENSIVE INCOME FROM PARENT COMPANY AND SUBSIDIARIES

Items that will not be reclassified subsequently to profit or loss (137) 49 (88) (356) (3) (359)Actuarial gains and losses on defined-benefit pension plans (194) 50 (144) 53 (16) 37Equity instruments at fair value through equity 57 (1) 56 (409) 13 (396)

Items that have been or will be reclassified to profit or loss in subsequent periods (67) (81) (148) (483) 29 (454)Translation adjustments on foreign activities 119 - 119 (213) - (213)Translation adjustments on foreign activities in hyperinflationary economies (99) - (99) (175) - (175)Partial hedge of the investment in Nissan (70) (87) (157) (102) 32 (70)Fair value adjustments on cash flow hedging instruments (1) (17) 6 (11) 7 (4) 3Debt instruments at fair value through equity (2) - - - - 1 1

Total other components of comprehensive income from parent company and subsidiaries (a) (204) (32) (236) (839) 26 (813)

SHARE OF ASSOCIATES AND JOINT VENTURES IN OTHER COMPONENTS OF COMPREHENSIVE INCOME

Items that will not be reclassified to profit or loss in subsequent periods 24 - 24 (206) - (206)Actuarial gains and losses on defined-benefit pension plans 23 - 23 (68) - (68)Other 1 - 1 (138) - (138)

Items that have been or will be reclassified to profit or loss in subsequent periods (3) 352 - 352 956 - 956Translation adjustments on foreign activities 407 - 407 960 - 960Other (55) - (55) (4) - (4)

Total share of associates and joint ventures in other components of comprehensive income (B) 376 - 376 750 - 750

OTHER COMPONENTS OF COMPREHENSIVE INCOME (A) + (B) 172 (32) 140 (89) 26 (63)

Comprehensive income 1,645 (1,486) 159 4,085 (697) 3,388Parent company shareholders’ share 1 3,221Non-controlling interests’ share 158 167

(1) Including €10 million reclassified to profit or loss in 2019 (€6 million in 2018).(2) Including €(1) million reclassified to profit or loss in 2019 (€2 million in 2018).(3) Including €3 million reclassified to profit or loss in 2019 following the full consolidation of ZAO GM-AVTOVAZ at December 31, 2019.



2.2.3 CONSOLIDATED FINANCIAL POSITION

ASSETS (€ million) Notes Dec. 31, 2019 (1) Dec. 31, 2018NON-CURRENT ASSETS Intangible assets and goodwill 10-A 6,949 5,913 Property, plant and equipment (2) 10-B 16,900 14,304 Investments in associates and joint ventures 21,232 21,439

Nissan 12 20,622 20,583Other associates and joint ventures 13 610 856

Non-current financial assets 22 1,072 928Deferred tax assets 8 1,016 952Other non-current assets 17 1,224 1,485 Total non-current assets 48,393 45,021CURRENT ASSETS Inventories 14 5,780 5,879 Sales Financing receivables 15 45,374 42,067 Automotive receivables 16 1,258 1,399 Current financial assets 22 2,216 1,963Current tax assets 17 86 111Other current assets 17 4,082 3,779 Cash and cash equivalents 22 14,982 14,777 Total current assets 73,778 69,975

Total Assets 122,171 114,996(1) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A2. The figures for 2018 have not been restated.(2) Including €669 million of right-to-use assets resulting from IFRS 16 “Leases” at the date of initial application.

SHAREHOLDERS’ EQUITY AND LIABILITIES (€ million) Notes Dec. 31, 2019 (1) Dec. 31, 2018 (2)

SHAREHOLDERS’ EQUITY Share capital 1,127 1,127 Share premium 3,785 3,785 Treasury shares (344) (400) Revaluation of financial instruments 232 236Translation adjustment (2,584) (2,826) Reserves 32,489 30,265Net income – parent-company shareholders’ share (141) 3,302Shareholders’ equity – parent-company shareholders’ share 34,564 35,489Shareholders’ equity – non-controlling interests’ share 767 599Total shareholders’ equity 18 35,331 36,088NON-CURRENT LIABILITIES Deferred tax liabilities 8 1,044 135Provisions for pension and other long-term employee benefit obligations – long-term 19 1,636 1,531 Other provisions – long-term 20 1,458 1,463 Non-current financial liabilities 23 8,794 6,209 Provisions for uncertain tax liabilities – long-term 8-C 187 140Other non-current liabilities 21 1,734 1,572 Total non-current liabilities 14,853 11,050CURRENT LIABILITIES Provisions for pension and other long-term employee benefit obligations – short-term 19 64 56 Other provisions – short-term 20 1,064 1,100 Current financial liabilities 23 2,780 2,463 Sales Financing debts 23 47,465 44,495 Trade payables 9,582 9,505 Current tax liabilities 8-C 223 289Provisions for uncertain tax liabilities – short-term 8-C 8 22Other current liabilities 21 10,801 9,928 Total current liabilities 71,987 67,858

Total shareholders’ equity and liabilities 122,171 114,996(1) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A2. The figures for 2018 have not been restated.(2) The figures for 2018 include a reclassification of provisions for uncertain tax liabilities, in application of an IFRIC decision of September 2019. These provisions are presented

in specific lines instead of in other provisions as previously (note 2-A3). Shareholders’ equity at December 31, 2018, has also been adjusted by an amount of €(57) million due to correction of an error concerning opérations in the Americas region, with a corresponding entry in other provisions.



2.2.4 CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

(€ million)

Number of shares

(thousands)

Share capital

Share premium

Treasury shares

Revaluation of financial

instruments

Translation adjustment

Reserves Net income (parent – company

shareholders’ share)

Shareholders’ equity (parent–

company shareholders’

share)

Shareholders’ equity (non-

controlling interests’

share)

Total share-

holders’ equity

Balance at Dec. 31, 2017 (1) 295,722 1,127 3,785 (494) 809 (3,376) 26,265 5,212 33,328 294 33,622Transition to IFRS 9 – Opening adjustments (21) (73) (94) (2) (96) Transition to IFRS 15 – Opening adjustments (229) (229) (9) (238) Application of IAS 29 - Opening adjustments 14 65 79 79Adjusted balance at January 1, 2018 295,722 1,127 3,785 (494) 788 (3,362) 26,028 5,212 33,084 283 33,3672018 net income 3,302 3,302 149 3,451Other components of comprehensive income (2) (3) (538) 487 (30) (81) 18 (63)2018 comprehensive income (538) 487 (30) 3,302 3,221 167 3,388Allocation of 2017 net income 5,212 (5,212)Dividends (958) (958) (94) (1,052)(Acquisitions) / disposals of treasury shares and impact of capital increases 94 94 94Changes in ownership interests (4) 33 39 72 241 313Index-based restatement in 2018 of equity items in hyperinflationary economies 3 86 89 1 90Cost of share-based payments and other (14) 13 (112) (113) 1 (112)Balance at Dec. 31, 2018 (5) 295,722 1,127 3,785 (400) 236 (2,826) 30,265 3,302 35,489 599 36,0882019 net income (141) (141) 160 19Other components of comprehensive income (3) (4) 267 (121) 142 (2) 1402019 comprehensive income (4) 267 (121) (141) 1 158 159Allocation of 2018 net income 3,302 (3,302)Dividends (966) (966) (96) (1,062)(Acquisitions) / disposals of treasury shares and impact of capital increases 56 56 56Changes in ownership interests (5) (5) 106 101Index-based restatement in 2018 of equity items in hyperinflationary economies (25) 59 34 34Cost of share-based payments and other (45) (45) (45)Balance at December 31, 2019 295,722 1,127 3,785 (344) 232 (2,584) 32,489 (141) 34,564 767 35,331

(1) Including €669 million of right-of-use assets resulting from IFRS 16 “Leases” at the date of initial application.(2) Shareholder’s equity at December 31, 2018 has been adjusted by an amount of €(57) million due to correction of an error concerning opérations in the Americas region, with a

corresponding entry in other provisions.(3) Changes in reserves correspond to actuarial gains and losses on defined-benefit pension plans recognized during the period.(4) Changes in ownership interests in 2018 include the effects of capital increases by Alliance Rostec Auto b.v. and AVTOVAZ, and acquisitions of shares in AVTOVAZ by Alliance Rostec

Auto b.v. as a result of a mandatory tender offer and a mandatory squeeze out (note 3-B).(5) The application of IFRS 16 “Leases” and IFRIC 23 “Uncertainty over income tax treatments” did not lead to any adjustments of opening shareholders’ equity.

Details of changes in consolidated shareholders’ equity in 2019 are given in note 18.



2.2.5 CONSOLIDATED CASH FLOWS

(€ million) Notes 2019 (1) 2018

Net income 19 3,451Cancellation of dividends received from unconsolidated listed investments (46) (44)Cancellation of income and expenses with no impact on cash

Depreciation, amortization and impairment 3,809 3,245 Share in net (income) loss of associates and joint ventures 190 (1,540) Other income and expenses with no impact on cash before interest and tax 26-A 1,937 1,396

Dividends received from unlisted associates and joint ventures 4 2Cash flows before interest and tax (2) 5,913 6,510Dividends received from listed companies (3) 625 828Net change in financing for final customers (2,612) (3,596)Net change in renewable dealer financing (659) (160)Decrease (increase) in Sales Financing receivables (3,271) (3,756)Bond issuance by the Sales Financing segment 23-C 3,869 4,245Bond redemption by the Sales Financing segment 23-C (4,034) (3,148)Net change in other debts of the Sales Financing segment 3,696 2,435Net change in other securities and loans of the Sales Financing segment (428) 61Net change in financial assets and debts of the Sales Financing segment 3,103 3,593Change in capitalized leased assets (1,059) (519)Change in working capital before tax 26-B 1,214 551CASH FLOWS FROM OPERATING ACTIVITIES BEFORE INTEREST AND TAX 6,525 7,207Interest received 78 67Interest paid (368) (332)Current taxes (paid) / received 8-C (636) (657)CASH FLOWS FROM OPERATING ACTIVITIES 5,599 6,285Property, plant and equipment and intangible investments 26-C (5,022) (4,407)Disposals of property, plant and equipment and intangible assets 31 131Acquisitions of investments involving gain of control, net of cash acquired 5 (29)Acquisitions of other investments (157) (215)Disposals of investments involving loss of control, net of cash transferred 2 -Disposals of other investments 36 8Net decrease (increase) in other securities and loans of the Automotive segments (2) (150)CASH FLOWS FROM INVESTING ACTIVITIES (5,107) (4,662)Dividends paid to parent-company shareholders 18-D (1,035) (1,027)Transactions with non-controlling interests (10) 11Dividends paid to non-controlling interests 18-H (96) (94)(Acquisitions) sales of treasury shares (36) (41)Cash flows with shareholders (1,177) (1,151)Bond issuance by the Automotive segments 23-C 1,557 1,895Bond redemption by the Automotive segments 23-C (574) (1,455)Net increase (decrease) in other financial liabilities of the Automotive segments (59) (242)Net change in financial liabilities of the Automotive segments 23-B 924 198CASH FLOWS FROM FINANCING ACTIVITIES (253) (953)

Increase (decrease) in cash and cash equivalents 239 670(1) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A2. The figures for 2018 have not been restated.(2) Cash flows before interest and tax do not include dividends received from listed companies.(3) Dividends received from Daimler (€46 million in 2019 and €44 million in 2018) and Nissan (€579 million in 2019 and €784 million in 2018).

(€ million) 2019 2018

Cash and cash equivalents: opening balance 14,777 14,057Increase (decrease) in cash and cash equivalents 239 670Effect of changes in exchange rate and other changes (34) 50Cash and cash equivalents: closing balance (1) 14,982 14,777

(1) Cash subject to restrictions on use is described in note 22-C.



2.2.6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2.2.6.1 INFORMATION ON OPERATING SEGMENTS AND REGIONS

The operating segments defined by Renault are the following:• The “Automotive excluding AVTOVAZ” segment, consisting of

the Group’s automotive activities as they existed before Renault acquired control of the AVTOVAZ group under IFRS 10. This segment comprises the production, sales, and distribution subsidiaries for passenger and light commercial vehicles, automobile service subsidiaries for the Renault, Dacia and Samsung brands, and the subsidiaries in charge of the segment’s cash management. It also

includes investments in automotive-sector associates and joint ventures, principally Nissan.

• The “AVTOVAZ” segment, consisting of the Russian automotive group AVTOVAZ and its parent company Alliance Rostec Auto b.v., which was formed at the end of 2016, after Renault acquired control over them, as defined by IFRS 10, in December 2016.

• The “Sales Financing” segment, which the Group considers as an operating activity in its own right, carried out for the distribution network and final customers by RCI Banque, its subsidiaries and its investments in associates and joint ventures.

A. Information by operating segment

A1. Consolidated income statement by operating segment

(€ million)

Automotive (excluding

AVTOVAZ) (1)

AVTOVAZ (1) Intra Automotive

transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

2019 (2) External sales 49,002 3,130 - 52,132 3,405 - 55,537Intersegment sales 105 774 (774) 105 18 (123) - Sales by segment 49,107 3,904 (774) 52,237 3,423 (123) 55,537 Operating margin (3) 1,289 156 (1) 1,444 1,223 (5) 2,662 Operating income 762 130 (1) 891 1,294 (80) 2,105 Financial income (expenses) (4) 179 (111) - 68 (10) (500) (442) Share in net income (loss) of associates and joint ventures (213) 2 - (211) 21 - (190) Pre-tax income 728 21 (1) 748 1,305 (580) 1,473Current and deferred taxes (1,122) 51 - (1,071) (383) - (1,454)Net income (394) 72 (1) (323) 922 (580) 19

(1) In 2019, external sales by the Automotive (excluding AVTOVAZ) segment include sales to the AVTOVAZ group, which amount to €246 million in 2019, and these sales are thus included in the AVTOVAZ segment’s intersegment transactions.

(2) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A2. The figures for 2018 have not been restated.(3) Details of amortization, depreciation and impairment are provided in the statement of consolidated cash flows by operating segment.(4) Dividends paid by the Sales Financing segment to the Automotive segments are included in the Automotive segments’ financial income and eliminated in the intersegment

transactions. They amount to €500 million in 2019.

(€ million)


AVTOVAZ) (1)

AVTOVAZ (1) Intra Automotive

transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

2018 External sales 51,171 3,040 - 54,211 3,208 - 57,419 Intersegment sales 96 815 (815) 96 18 (114) -Sales by segment 51,267 3,855 (815) 54,307 3,226 (114) 57,419 Operating margin (2) 2,202 204 - 2,406 1,204 2 3,612 Operating income 1,583 209 - 1,792 1,193 2 2,987 Financial income (expenses) (3) (97) (95) - (192) (11) (150) (353) Share in net income (loss) of associates and joint ventures 1,527 (3) - 1,524 16 - 1,540 Pre-tax income 3,013 111 - 3,124 1,198 (148) 4,174 Current and deferred taxes (369) (26) - (395) (330) 2 (723) Net income 2,644 85 - 2,729 868 (146) 3,451

(1) In 2018, external sales by the Automotive (excluding AVTOVAZ) segment include sales to the AVTOVAZ group, which amount to €311 million in 2018, and these sales are thus included in the AVTOVAZ segment’s intersegment transactions.

(2) Details of amortization, depreciation and impairment are provided in the statement of consolidated cash flows by operating segment.(3) Dividends paid by the Sales Financing segment to the Automotive segments are included in the Automotive segments’ financial income and eliminated in the intersegment

transactions.



A2. Consolidated financial position by operating segment

DECEMBER 31, 2019 (1)

Automotive (excluding AVTOVAZ)

AVTOVAZ Intra Automotive

transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

ASSETS (€ million)

NON-CURRENT ASSETS Property, plant and equipment and intangible assets and goodwill 21,701 1,740 - 23,441 408 - 23,849Investments in associates and joint ventures 21,087 3 - 21,090 142 - 21,232Non-current financial assets – equity investments 7,478 - (1,025) 6,453 2 (5,577) 878Non-current financial assets – other securities, loans and derivatives on financing opérations of the Automotive segments

194 - - 194 - - 194

Deferred tax assets and other non-current assets 1,446 469 (108) 1,807 433 - 2,240Total non-current assets 51,906 2,212 (1,133) 52,985 985 (5,577) 48,393

CURRENT ASSETSInventories 5,379 352 - 5,731 49 - 5,780Customer receivables 1,175 183 (87) 1,271 46,252 (891) 46,632Current financial assets 1,197 5 (7) 1,195 1,948 (927) 2,216Current tax assets and other current assets 3,003 66 (3) 3,066 5,984 (4,882) 4,168Cash and cash equivalents 12,231 70 (3) 12,298 2,762 (78) 14,982Total current assets 22,985 676 (100) 23,561 56,995 (6,778) 73,778

Total assets 74,891 2,888 (1,233) 76,546 57,980 (12,355) 122,171

SHAREHOLDERS’ EQUITY AND LIABILITIES (€ million)

SHAREHOLDERS’ EQUITY 35,214 1,108 (1,028) 35,294 5,632 (5,595) 35,331

NON-CURRENT LIABILITIES Long-term provisions 2,604 37 - 2,641 640 - 3,281Non-current financial liabilities 7,106 821 - 7,927 867 - 8,794Deferred tax liabilities and other non-current liabilities 1,982 60 (108) 1,934 844 - 2,778Total non-current liabilities 11,692 918 (108) 12,502 2,351 - 14,853

CURRENT LIABILITIES Short-term provisions 1,034 66 - 1,100 36 - 1,136Current financial liabilities 3,785 100 (10) 3,875 - (1,095) 2,780Trade payables and Sales Financing debts 9,520 487 (84) 9,923 48,253 (1,129) 57,047Current tax liabilities and other current liabilities 13,646 209 (3) 13,852 1,708 (4,536) 11,024Total current liabilities 27,985 862 (97) 28,750 49,997 (6,760) 71,987

Total shareholders’ equity and liabilities 74,891 2,888 (1,233) 76,546 57,980 (12,355) 122,171(1) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A2.



DECEMBER 31, 2018



transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

ASSETS (€ million)

NON-CURRENT ASSETS Property, plant and equipment and intangible assets and goodwill 18,448 1,422 - 19,870 347 - 20,217 Investments in associates and joint ventures 21,314 11 - 21,325 114 - 21,439Non-current financial assets – equity investments 6,907 - (855) 6,052 2 (5,201) 853Non-current financial assets – other securities, loans and derivatives on financing opérations of the Automotive segments

75 - - 75 - - 75

Deferred tax assets and other non-current assets 1,738 342 (107) 1,973 464 - 2,437Total non-current assets 48,482 1,775 (962) 49,295 927 (5,201) 45,021

CURRENT ASSETS Inventories 5,515 321 - 5,836 43 - 5,879 Customer receivables 1,295 205 (80) 1,420 42,854 (808) 43,466 Current financial assets 1,415 - (6) 1,409 1,369 (815) 1,963Current tax assets and other current assets 2,764 157 (4) 2,917 5,028 (4,055) 3,890Cash and cash equivalents 11,691 89 (3) 11,777 3,094 (94) 14,777 Total current assets 22,680 772 (93) 23,359 52,388 (5,772) 69,975

Total assets 71,162 2,547 (1,055) 72,654 53,315 (10,973) 114,996

SHAREHOLDERS’ EQUITY AND LIABILITIES (€ million)

SHAREHOLDERS’ EQUITY (1) 36,004 908 (859) 36,053 5,249 (5,214) 36,088

NON-CURRENT LIABILITIES

Long-term provisions 2,529 27 - 2,556 578 - 3,134 Non-current financial liabilities 5,508 688 - 6,196 13 - 6,209 Deferred tax liabilities and other non-current liabilities 1,070 34 (106) 998 709 - 1,707Total non-current liabilities 9,107 749 (106) 9,750 1,300 - 11,050

CURRENT LIABILITIES Short-term provisions 1,103 44 - 1,147 31 - 1,178Current financial liabilities 3,258 94 (9) 3,343 - (880) 2,463 Trade payables and Sales Financing debts 9,279 495 (78) 9,696 45,311 (1,007) 54,000 Current tax liabilities and other current liabilities 12,411 257 (3) 12,665 1,424 (3,872) 10,217Total current liabilities 26,051 890 (90) 26,851 46,766 (5,759) 67,858

Total shareholders’ equity and liabilities 71,162 2,547 (1,055) 72,654 53,315 (10,973) 114,996(1) The figures for 2018 include a reclassification of provisions for uncertain tax liabilities, in application of an IFRIC decision of September 2019. These provisions are presented

in specific lines instead of in other provisions as previously (note 2-A3). Shareholders’ equity at December 31, 2018, has also been adjusted by an amount of €(57) million due tocorrection of an error concerning opérations in the Americas region, with a corresponding entry in other provisions.



A3. Consolidated cash flows by operating segment

(€ million)



transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

2019 (1) Net income (2) (394) 72 (1) (323) 922 (580) 19Cancellation of dividends received from unconsolidated listed investments (46) - - (46) - - (46)Cancellation of income and expenses with no impact on cash

Depreciation, amortization and impairment 3,607 120 - 3,727 82 - 3,809Share in net (income) loss of associates and joint ventures 213 (2) - 211 (21) - 190Other income and expenses with no impact on cash, before interest and tax 1,355 50 - 1,405 475 57 1,937

Dividends received from unlisted associates and joint ventures 4 - - 4 - - 4Cash flows before interest and tax (3) 4,739 240 (1) 4,978 1,458 (523) 5,913Dividends received from listed companies (4) 625 - - 625 - - 625Decrease (increase) in sales financing receivables - - - - (3,353) 82 (3,271)Net change in financial assets and Sales Financing debts - - - - 2,968 135 3,103Change in capitalized leased assets (1,002) - - (1,002) (57) - (1,059)Change in working capital before tax 1,829 15 - 1,844 (635) 5 1,214CASH FLOWS FROM OPERATING ACTIVITIES BEFORE INTEREST AND TAX 6,191 255 (1) 6,445 381 (301) 6,525Interest received 73 5 - 78 - - 78Interest paid (301) (87) 1 (387) - 19 (368)Current taxes (paid)/received (367) (11) - (378) (258) - (636)CASH FLOWS FROM OPERATING ACTIVITIES 5,596 162 - 5,758 123 (282) 5,599Purchases of intangible assets (2,016) (67) - (2,083) (3) - (2,086)Purchases of property, plant and equipment (2,846) (95) 15 (2,926) (10) - (2,936)Disposals of property, plant and equipment and intangibles 16 27 (14) 29 2 - 31Acquisitions and disposals of investments involving gain or loss of control, net of cash acquired (55) (9) - (64) 71 - 7Acquisitions and disposals of other investments and other (120) - - (120) (1) - (121)Net decrease (increase) in other securities and loans of the Automotive segments (3) 1 - (2) - - (2)CASH FLOWS FROM INVESTING ACTIVITIES (5,024) (143) 1 (5,166) 59 - (5,107)Cash flows with shareholders (1,165) (1) - (1,166) (511) 500 (1,177)Net change in financial liabilities of the Automotive segments 1,180 (49) - 1,131 - (207) 924CASH FLOWS FROM FINANCING ACTIVITIES 15 (50) - (35) (511) 293 (253)

Increase (decrease) in cash and cash equivalents 587 (31) 1 557 (329) 11 239(1) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A. The figures for 2018 have not been restated.(2) Dividends paid by the Sales Financing segment to the Automotive segments are included in the net income of the Automotive (excluding Avtovaz) segment. They amount

to €500 million in 2019.(3) Cash flows before interest and tax do not include dividends received from listed companies.(4) Dividends received from Daimler (€46 million) and Nissan (€579 million).

(€ million)



transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

2019 Cash and cash equivalents: opening balance 11,691 89 (3) 11,777 3,094 (94) 14,777Increase (decrease) in cash and cash equivalents 587 (31) 1 557 (329) 11 239Effect of changes in exchange rate and other changes (47) 12 (1) (36) (3) 5 (34)Cash and cash equivalents: closing balance 12,231 70 (3) 12,298 2,762 (78) 14,982



(€ million)



transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

2018 Net income 2,644 85 - 2,729 868 (146) 3,451Cancellation of dividends received from unconsolidated listed investments (44) - - (44) - - (44)Cancellation of income and expenses with no impact on cash

Depreciation, amortization and impairment 3,066 109 - 3,175 70 - 3,245Share in net (income) loss of associates and joint ventures (1,527) 3 - (1,524) (16) - (1,540)Other income and expenses with no impact on cash, before interest and tax 825 90 (1) 914 503 (21) 1,396

Dividends received from unlisted associates and joint ventures 2 - - 2 - - 2Cash flows before interest and tax(1) 4,966 287 (1) 5,252 1,425 (167) 6,510Dividends received from listed companies (2) 828 - - 828 - - 828Decrease (increase) in sales financing receivables - - - - (3,586) (170) (3,756)Net change in financial assets and Sales Financing debts - - - - 3,593 - 3,593Change in capitalized leased assets (509) - - (509) (10) - (519)Change in working capital before tax 781 16 6 803 (331) 79 551CASH FLOWS FROM OPERATING ACTIVITIES BEFORE INTEREST AND TAX 6,066 303 5 6,374 1,091 (258) 7,207Interest received 71 5 (2) 74 - (7) 67Interest paid (263) (95) 2 (356) - 24 (332)Current taxes (paid)/received (388) (14) - (402) (255) - (657)CASH FLOWS FROM OPERATING ACTIVITIES 5,486 199 5 5,690 836 (241) 6,285Purchases of intangible assets (1,735) (32) - (1,767) (4) - (1,771)Purchases of property, plant and equipment (2,557) (83) 19 (2,621) (15) - (2,636)Disposals of property, plant and equipment and intangibles 126 31 (24) 133 - (2) 131Acquisitions and disposals of investments involving gain or loss of control, net of cash acquired (15) (2) - (17) (12) - (29)Acquisitions and disposals of other investments and other (159) - - (159) (48) - (207)Net decrease (increase) in other securities and loans of the Automotive segments (156) - 6 (150) - - (150)CASH FLOWS FROM INVESTING ACTIVITIES (4,496) (86) 1 (4,581) (79) (2) (4,662)Cash flows with shareholder (1,149) - - (1,149) (153) 151 (1,151)Net change in financial liabilities of the Automotive segments 233 (139) (7) 87 - 111 198CASH FLOWS FROM FINANCING ACTIVITIES (916) (139) (7) (1,062) (153) 262 (953)

Increase (decrease) in cash and cash equivalents 74 (26) (1) 47 604 19 670(1) Cash flows before interest and tax do not include dividends received from listed companies.(2) Dividends received from Daimler (€44 million) and Nissan (€784 million).

(€ million)



transactions

Total Automotive

Sales Financing

Inter- segment

transactions

Conso- lidated

total

2018Cash and cash equivalents: opening balance 11,718 130 (3) 11,845 2,354 (142) 14,057Increase (decrease) in cash and cash equivalents 74 (26) (1) 47 604 19 670Effect of changes in exchange rate and other changes (101) (15) 1 (115) 136 29 50Cash and cash equivalents: closing balance 11,691 89 (3) 11,777 3,094 (94) 14,777



A4. Other information for the Automotive segments: net cash position or net financial indebtedness and operational free cash flow

The net cash position or net financial indebtedness and operational free cash flow are only presented for the Automotive segments, since these indicators are not relevant for monitoring Sales Financing activity.

The net cash position or net financial indebtedness includes all non-operating interest-bearing financial liabilities and commitments less cash and cash equivalents and other non-operating financial assets such as marketable securities or the segment’s loans.

Net cash position (net financial indebtedness)

DECEMBER 31, 2019 (€ million)


AVTOVAZ) (1)

AVTOVAZ (1) Intra-Automotive

transactions

Total Automotive

Non-current financial liabilities (7,106) (821) - (7,927) Current financial liabilities (3,785) (100) 10 (3,875) Non-current financial assets – other securities, loans and derivatives on financing opérations 64 - - 64 Current financial assets 1,180 1 (7) 1,174 Cash and cash equivalents 12,231 70 (3) 12,298 Net cash position (net financial indebtedness) of the Automotive segments 2,584 (850) - 1,734

(1) The impacts of application of IFRS 16 “Leases” from January 1, 2019 are presented in note 2-A2. The figures for 2018 have not been restated.

DECEMBER 31, 2018 (€ million)


AVTOVAZ Intra-Automotive

transactions

Total Automotive

Non-current financial liabilities (5,508) (688) - (6,196)Current financial liabilities (3,258) (94) 9 (3,343)Non-current financial assets – other securities, loans and derivatives on financing opérations 55 - - 55Current financial assets 1,415 - (6) 1,409Cash and cash equivalents 11,691 89 (3) 11,777Net cash position (net financial indebtedness) of the Automotive segments 4,395 (693) - 3,702

Operational free cash flow

2019 (€ million)



transactions

Total Automotive

Cash flows (excluding dividends from listed companies) before interest and tax 4,739 240 (1) 4,978 Changes in working capital before tax 1,829 15 - 1,844 Interest received by the Automotive segments 73 1 - 78 Interest paid by the Automotive segments (301) (87) 1 (387) Current taxes (paid) / received (367) (11) - (378) Acquisitions of property, plant and equipment, and intangible assets net of disposals (4,846) (135) 1 (4,980) Capitalized leased vehicles and batteries (1,002) - - (1,002) Operational free cash flow of the Automotive segments (1) 125 27 1 153

(1) The definition of Operational free cash flow used in 2019 is the same as in 2018. In 2018, Operational free cash flow was presented after deduction of rental expenses in cash flows from operating activities, while from 2019, as a result of application of IFRS 16, only cash flows relating to interest paid are presented in cash flows from operating activities. The residual balance, consisting of lease payments, is presented in cash flows from financing activities (net change in financial liabilities of the Automotive segments) and is thus excluded from the Operational free cash flow. Without application of IFRS 16, the Operational free cash flow for 2019 would amount to €57 million.

2018 (€ million)



transactions

Total Automotive

Cash flows (excluding dividends from listed companies) before interest and tax 4,966 287 (1) 5,252 Changes in working capital before tax 781 16 6 803 Interest received by the Automotive segments 71 5 (2) 74Interest paid by the Automotive segments (263) (95) 2 (356) Current taxes (paid) / received (388) (14) - (402) Acquisitions of property, plant and equipment, and intangible assets net of disposals (4,166) (84) (5) (4,255) Capitalized leased vehicles and batteries (509) - - (509) Operational free cash flow of the Automotive segments 492 115 - 607



B. Information by Region

The Regions presented correspond to the geographic divisions used for Group management. The regions are defined in section 1.3.1.3 of the Universal Registration Document.Consolidated revenues are presented by location of customers. The Group adjusted its international organization in 2019. The former Asia-Pacific and Africa-Middle East-India regions were reorganized to form two new regions:

• The China region specifically covers the Group’s activities in China;• The Africa – Middle East – India – Asia-Pacific region covers Africa and

Middle-East countries, India, the countries of the ASEAN (Association of South-East Asian Nations), Korea, Japan and Australia.

Figures for 2018 correspond to the new segments adopted in 2019.Property, plant and equipment and intangibles are presented by location of subsidiaries and joint operations.

(€ million)

Europe (1) Américas China Africa Middle-East

India Asia-Pacific

Eurasia Consolidated total

2019

Revenues 36,516 4,435 127 7,038 7,421 55,537Including AVTOVAZ 42 3 - 14 3,317 3,376

Property, plant and equipment and intangibles 17,392 852 179 1,307 4,119 23,849Including AVTOVAZ - - - - 1,740 1,740

2018

Revenues 36,704 4,684 275 8,194 7,562 57,419 Including AVTOVAZ 39 2 - 18 3,292 3,351

Property, plant and equipment and intangibles 14,800 821 - 1,180 3,416 20,217 Including AVTOVAZ - - - - 1,422 1,422

(1) Including the following for France:

(€ million) 2019 2018

Revenues 13,581 13,533Property, plant and equipment and intangibles 13,773 11,735

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